moment, benjamin netanyahu and secretary of state hillary clinton wrapped up their talks here in jerusalem. remember, much more coming up. that's it for me right now. i'm wolf blitzer in jerusalem. erin burnett "outfront" starts right now. "outfront" next. the seventh day of deadly violence between israel and gaza. no cease-fire tonight. blasts continuing overnight. secretary of state hillary clinton in jerusalem to meet with prime minister benjamin netanyahu. that meeting moments ago. and four men from southern california arrested by the fbi. accused of trying to join al qaeda and wage violent jihad against america. let's go "outfront." ♪ good evening, everyone. i'm erin burnett. "outfront" tonight, no cease-fire. the killing continues in israel and gaza. the conflict in its seventh day. u.s. secretary of state hillary

clinton in jerusalem tonight. she arrived late and went straight to a meeting with prime minister benjamin netanyahu. >> america's commitment to israel's security is rock-solid, and unwavering. that is why we believe it is essential to deescalate the situation in gaza. >> deescalate the situation in gaza. what does deescalate mean? there was a spade of rockets just a moment ago, but yet that's the key word being used by the administration. during a brief press conference with prime minister netanyahu, there was no mention of a cease-fire. netanyahu said israel is prepared to take whatever action is necessary to defend itself. and egypt, which is brokering a deal between the two sides, cancelled a press conference where officials were expected to announce a deal with terms for a cease-fire. tomorrow, secretary clinton meets with the palestinian president, mahmoud abbas and then will fly to egypt to speak with president mohamed morsi. that is going to be a very interesting conversation,

because, of course, as so many of you are aware, morsi is in a tough situation. many of the people in egypt, obviously, don't support working with israel at all. and within the past hour, there were several explosions in gaza city. let's get straight to our team there. >> obviously, looks like we're having a problem with that shot. we'll be getting there in just a moment. difficult to communicate with them, because of these rockets that have been going off. let's try again. let's go back there to ben. >> here in gaza. there were a few hours of relative quiet. but as we have seen within really the last 15 minutes, an intense attack on a building behind right where i am. it's a complex where we understand there are some government offices, and we understand from other palestinian sources that some of

the security personnel who were vacated from other areas, other offices around gaza, may have been working out of that building. so certainly there was talk earlier this evening of the possibility of a cease-fire. hamas officials say, in fact, it would have been announced hours ago in cairo. clearly, that's not happening. there's no sign of a cease-fire. in fact, certainly, if you look -- if we go back over the last few hours, five or six hours, it's been an evening of fairly intense fire, not only incoming israeli air strikes, but just a little while ago, we saw two rockets being launched also from this area behind me. and certainly by the looks of those rockets, and we're getting very good at recognizing them, some of them do appear to be these so-called 5 rockets, which have a fairly long range, rockets fired in the direction of tel aviv and jerusalem.

also today, one of those rockets falling to the south near the settlement block in the west bank. and another building, an israeli building a town outside tel aviv on the road to jerusalem. so we've seen a fairly intense evening, certainly, of violence here, incoming, as well as outgoing. and all this talk about a ceasefire and discussions in cairo and elsewhere don't seem to be amounting to much at this time. now, today we did see something interesting. something we didn't see during the last four years ago, the so-called israeli operation cast led. today we saw a very large delegation being led by nabil, the general of the arab league, here also with the foreign ministers of jordan, of iraq, of turkey, and others. and this is a first for gaza, which is not accustomed to this.

if you recall over the hamas takeover in june of 2007, hamas was for many years an isolated place which hamas had very few friends. in fact, it could only look, for instance, to syria and iran for real support. but recently, of course, hamas has broken from iran. its offices in syria have been shuttered, and it has become very close to egypt, which is now under the leadership of mohamed morsi, a member of the muslim brotherhood. it also enjoys very close relations with qatar and turkey. so i followed these arab ministers around gaza today. they went to the shiffa hospital where many wounded are staying. and i spoke with several of them. many of them stressing one interesting point. that the arab spring has changed the way arab countries approach

gaza. before countries like egypt were very wary of offending their american patrons and kept hamas at an arm's length. dealt with hamas, but it was well-known he did not like hamas at all, given its affiliations with the muslim brotherhood in egypt. some of these ministers telling me that they feel that the united states in this crisis has played a very passive role in trying to resolve this crisis. and what we're seeing is the emergence of other countries like turkey, egypt, qatar, in trying to address the situation here. >> all right, our thanks to ben wedeman in gaza city. sara sidner is in jerusalem with the latest on the israeli side of things. sara, the death toll is climbing. the escalation as ben has been reporting, the rockets over the

past couple hours. israel, we understood demanded a day of calm, 24 hours of calm before they would sign a peace deal. no announcement of a cease-fire. why didn't it happen? >> reporter: this has been the problem. there has been a lot of talk that they're very, very close. one side says they're 90%, one side says wait a minute, we're not going to agree to your terms. and there has been sort of some kind of optimism, sometimes from the civilians hoping that yeah, something will happen so this all stops, and then it all falls apart. so it's one of those situations where you really have to wait until the deal is done and then make sure the teal sticks. so there is no more rockets coming over on to the israel side, no more air strikes happening inside gaza. then people will start to believe that this is actually going to happen and there's some kind of truth, some kind of cease fire. but first prime minister benjamin netanyahu was asking for 24 hours of calm before even getting to talks about an actual deal where there is a ceasefire in place.

and that 24 hours of calm has been broken many times over the past few hours. in fact, just an hour ago, we saw what was the light in the sky that either is a rocket or the iron dome knocking a rocket out of the air that came from gaza. so it is one of those situations where if it keeps going back and forth, back and forth, back and forth, there is very -- it's very unlikely they're going to be able to come to some agreement on a truce or some sort of a ceasefire. >> and sara, obviously we know that tonight hillary clinton arrived this afternoon and just finished her meeting with prime minister benjamin netanyahu which went late. tomorrow with palestinian -- the plo and then going to cairo. is she going to play a real role? do you think she can really help get this done, or is this more of a -- ceremonial, the united states sort of doing what it has to do? >> reporter: well, i don't think that it's necessarily ceremonial. i think that they're hoping that there can be some pressure put -- some pressure on both sides to try and get this at

least resolved for some time, so things can calm down and not escalate to a ground war. we also heard from u.n. secretary general ban ki-moon saying a ground war would be the worst thing because it would cause a potential of regional conflict, not just with gaza but other places in the region. and is so there's this whole worry this is going to turn into more of an escalation instead of a deescalation. so i think they have come here, hillary clinton has come here, to try and see if she can find some thread that she can kind of hold the two sides together. will it happen? we'll have to wait and see. there has been a lot of talk, as i said before, about cease-fires over the past few days, and it just hasn't happened. and the people on both sides -- i mean, we've gone to places in gaza where entire homes are destroyed, where people have lost their children. we've also been to homes on this side of the border in bercheva today at a house hit by a rocket, a girl inside, 21 years

old studying, and she was terrified. and seeing the damage and destroyed lives of these families. nobody wants to live like this, erin. >> certainly just a tragedy on all sides. as we said, deescalate the word used today. but escalation, what is actually seeming to happen tonight. israel and gaza accuse each other of targeting civilians with their deadly strikes. representatives from both sides have come out front to respond to the charges. that's next. big questions for the gop following mitt romney's big loss. the republican soul-searching is getting serious. a naval gaze of all naval gazes. and chairman ben bernanke on the fiscal cliff. well, if it isn't mr. margin. mr. margin? don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups.

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tonight, across gaza, people are being told to flee their homes by the israeli defense force. they're trying to find shelter. arwa damon has the story of what it's like on the ground. >> reporter: this is the first family we came across. barreling down the road. all they knew was that they did

not dare stay at home. we left without knowing where to go, she tells us, cradling her 4-month-old. they could hear explosions as they fled. what caused the mass exodus was the israeli army dropping leaflets, warning residents in certain areas, they needed to depart immediately for gaza city. and the leaflette even indicates specifically which routes they should take to stay safe. and though few believed the israelis, leaving was a better option than staying behind. she says, their house was hit a few days ago. this is the second school they have actually gone to, looking for a safe place to stay. but it obviously was full, as well. and now we're going with them to try out a third one. it's already packed. people angrily move benches,

staking their claim. there is another school, a young man gestures, come with me. amidst the frantic search, fear. four years ago, the last time israel launched an operation in gaza, a school was bombed. the israelis said hamas was using the cover of schools to fire rockets. but whatever the risk, for these families, there is no alternative. this just gives an idea of how chaotic this situation is. this is the fourth school the family has been to now looking for a place to stay. finally, they find a room. come, come quickly, calls the rest of the family, as others help to clear space. she is exhausted. and stunned. the children arrive talking breathlessly about seeing a ball of fire outside. we're less than a minute away from the school, and while we were standing in there, we actually felt the windows of the building there shaking from an

explosion and it seems this was the target. little reassurance for those that fled to stay safe. >> so poignantly told about the children suffering and what these images will do to them as they grow up. it's such a tragedy. now let's go to ian lee in cairo. hillary clinton meeting with president morsi tomorrow, instrumental in trying to broker a peace deal. ian, let me ask the question, whether you think morsi can get a deal done. is egypt really going to be able to do this? >> reporter:el well, erin, he definitely is the man who has a lot of potential to strike a deal between the israelis and hamas. but president mohamed morsi and his muslim brotherhood base have long been a very staunch ally of hamas. they have had close relationships for decades. and so they will be able to influence hamas in coming to the

table and forming some sort of negotiation to a ceasefire. also, egypt has for the past few decades had close working relationship with israel. so it does seem likely these two can come together, along with secretary hillary clinton's help and support to probably form some sort of cease fire. >> ian, i'm curious, there are reports of egyptian men going forward with sal darety to fight. egyptian doctors and medics have gone in to help in hamas. will the egyptian people tolerate their president working with israel? i mean, i understand the solidarity with hamas, but working with israel, does he have the buy-in for that? >> reporter: i think the egyptian people will support him if he's working toward some sort of cease-fire to stop the violence in gaza. he's had somewhat of a political

victory, a short-term political victory here in egypt, because he has come out so strongly against israel and israel's actions in had gaza. the only problem is this conflict lasts longer -- this sentiment on the street, they may want him to do more. and that is the question. will president mohamed morsi, is he willing to do more, at risk of alienating the international community? >> all right. thank you very much, ian. we appreciate your time. the gop now facing questions after mitt romney's big loss, and four men from southern california are in custody tonight. they're accused of trying to join al qaeda and wage violent jihad against american troops. "outfront" continues. is a complete multivitamin wom+ designed for women's health concerns as we age. it has more of 7 antioxidants to support cell health. one a day 50+.

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our third story "outfront." a plot to kill americans. tonight, four men from southern california arrested by the fbi. they are accused of trying to join al qaeda and the taliban and wage violent jihad against american troops and american targets overseas. key yang wa is "outfront." >> reporter: an event so unusual that neighbor jen collins snapped pictures from her front

window. she was so alarmed, she didn't fully open the blinds, but could see federal agents descending on her neighbor, now charged in a terrorist conspiracy. >> it's kind of like shocking. is it safe for my son to go outside? >> reporter: according to the criminal complaint, the apparent ring leader is 34-year-old sahil, born in afghanistan but a naturalized citizen and former resident of pomona, california. the complaint, one of the defense defendants referring to him walking around the streets of l.a. and came out here to recruit others. the complaint says the four southern california men shared violent and extremist material on facebook, including video messages from anwar al awlaki, and they liked various links and postings. the complaint alleges the men, once in afghanistan, planned to target american military bases, one telling a federal informant

that he hoped to load up a truck with c4 explosives and just drive it into, like, the baddest military base. i'm going to take out a whole base. >> i think any time you have individuals here in the united states that are conspiring to go overseas to commit violent acts against members of the united states military and/or any other members, be it civilian contractors or nationalized people over there working, we think that is extremely serious. >> she joins me now. what do we know about the ethnicity of these men? it wasn't what you might expect. >> absolutely not. not the typical profile, and something specifically the fbi wanted to address. we're talking about three suspects, one latino, the other two asian, vietnamese and filipino. the reason the fbi wants to talk about it, this is home-grown terror, involving people who live on american soil, and at the don't look like what you

might think, erin. >> and were they training at all, or how far were they? >> in a lot of these cases, you do think this is just a lot of chatter, right? not in this case. they trained for this, they fired various types of assault weapons. they went to a paint ball facility to understand what it feels like to shoot and be shot at. and something else we should mention. kabir was in the air force, u.s. air force, for a year-and-a-half. he was honorably discharged at the end of 2001. we don't have many more details than that. but certainly, erin, the fbi agents are telling us this was absolutely a very serious threat and home-grown. >> thank you very much for reporting on that. "outfront" next, the fiscal cliff looms. fed chairman ben bernanke has decided he has to get involved. and with cease-fire talks stalled want to tonight, secretary clinton met with the prime minister of israel.

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welcome back to the second

half of "outfront." we start with stories we care about. we'll be focused on our reporting with ben bernanke, the federal reserve chairman weighed in on the fiscal cliff, warning policymakers, do a deal. >> uncertainty about how the fiscal cliff, the raising of the at the time limit and longer-term budget situation will be addressed appears already to be affecting private spending and investment decisions and may be contributing to an increased sense of caution in financial markets with adverse effects on the economy. continuing to push off difficult policy choices will only prolong and intensify these uncertainties. >> he went on to say, if we do get a plan that solves the government budget issues without hurting the economic recovery, next year could be a good one. that is so many if it. the investigation of the shooting at the sikh temple is concluded. the shooter, michael page, acted alone and did not happen. he had been linked to white

supremacist groups, but the fbi found no evidence to conclude he had help or was acting under any directive from them. they also said the attack was not part of any ongoing threat to the sikh community. defense secretary leon panetta talked about how the american fight against al qaeda is changing. he said that, yes, the united states has had a lot of success, but al qaeda has been adapting and trying to find new safe havens and to combat this, panetta says new campaigns will take place outside declared comb combat zones using a small footprint approach. he went on to say america will partner with foreign forces to learn how to combat terrorism on their own. wondering if he was referring directly to the situation in mally. hostess brands, makers of twinkies and wonder bread, both bad for you and beloved and the bakers union was unsuccessful which means they'll go ahead with its liquidation plans. last week it blamed the union which has been on strike since

november 9th. the company said the strike crippled its ability to produce products and drove it out of business. it's 474 days since the u.s. lost its top credit rating. let's get a deal done on the fiscal cliff. there was good news today on housing. construction of new homes hit a four-year high in october. now our fourth story "outfront." urgent talks for a truce. tonight secretary of state hillary clinton in jerusalem. she made a last-minute effort to broker a deal to stop the fighting between israel and hamas. but as you've been seeing over the past hour, there are more explosions in gaza city. huge plumes of smoke going up, anderson, as you see there, ben wedeman, arwa damon all there describing it as an escalation they have seen. these are the largest blasts they have seen in the last couple days and the attacks come hours before secretary clinton is scheduled to travel to ramala to meet with president mahmoud abbas. when that meeting is done, she

goes to egypt to meet with the man at the center, mohamed mo i morsi. two men who shaped foreign policy, jamie reuben, director of public affairs and nick burns, political affairs and ambassador to nato. the two perfect people to answer the question. jamie, let me ask you, what kind of leverage does secretary of state hillary clinton have and what does it mean that the united states decided to have her get involved in this now when egypt was, you know, supposedly going to be the one able to broker a deal? >> well, i think they probably felt that the involvement of the united states was the only player that could talk to the israelis in a unique way. none of the other players involved, egypt, turkey, any of the europeans weren't involved. so nobody had any ability to talk directly to the israelis. and other than the egyptians. and i suspect the israelis are finding the new egypt very dech different than the old egypt. the old egypt did not see hamas as a brother in arms.

they saw hamas as really a very different sort of arab cause. that's president mubarak. and now the president of egypt sees hamas as part of the larger muslim brotherhood movement. so israel didn't have anyone, probably, to talk to. and i suspect the united states was worried that this situation was going to possibly spin out of control. >> and obviously, since that meeting finished, the rockets, as he we said, the worst our reporters have seen. nick, where are we going from here? everyone is talking about a cease-fire. but yet when hillary clinton spoke about it, the united states spoke about it today, they didn't use that word. they used this word i did not understand called de-escalating. here is the secretary of state. >> america's commitment to israel's security is rock-solid. and unwavering. that is why we believe it is essential to deescalate the situation in gaza. >> nick, what does deescalate mean? is that diplomatic double-speak? it is not cease-fire.

>> well, the israelis spoke today about a period of calm, is the way they called it, for 24 hours before they could entertain a cease-fire. i think the israelis now have had months and intensive weeks of shelling of their southern cities by hamas. very provocative acts by hamas. the israelis need to be convinced hamas is going to stop its rocketing of the israeli population and want to test mohamed morsi. can can he deliver a deal? as jamie said, this is a new egypt. and there's no more standoffish relationship with the hamas organization. mohamed morsi has identified with them, supported them throughout this conflict. but then again, mohamed morsi has a relationship, the president of egypt, with the united states of america, with europe, with the international financial institutions. he's the one who needs to facilitate, leverage, pressure, hamas to agree to the cease-fire. and i do agree with jamie, as well. hillary clinton is essential now. the united states is the only country that can put together either a period of calm,

deescalation or a full cease-fire. and then hopefully if that is achieved, pick up the initiative and try to reinvigorate discussions between palestinians and it's reallies. >> one thing this has me thinking about, people complain about the middle east and the conflict and the united states having to always deal with it of the only thing worse than being needed may be being not needed. is the united states losing influence? >> there's no question, america's role in the middle east has changed. we have pulled our forces out of iraq. we have leaders in the arab world now that are not as tied to the united states as, say, mubarak was. the united states hasn't been at the center of a peace process between israel and the palestinians in a decade now that it achieved any substantial success. so in those terms, military terms, diplomatic terms, we also don't have a large pocketbook to offer, large-scale martial aid.

so economically, diplomatically, politically, militarily, our role has changed. but as we're seeing, we still have one thing in that part of the world nobody else in the world has, and that's an ability to speak to the israelis and to arabs. there are -- is no other country that has the relationship with israel we have. whether that will be sufficient to solve this problem, we'll just have to see. >> nick, who do you think if there is a cease-fire in the next day or two, who -- did anybody gain anything? i mean -- i'm talking about harass or israel. did anybody gain? >> i think hamas has been the big loser here. they started this. they have been -- they have not met many of their goals. they're going to now have to sue for a cease-fire. they may win some interpalestinian arguments, because fatah in the west bank, the palestinian authority, looks very weak right now. but i think internationally, surprising quiet. not many countries come into hamas' defense, and i think the

israeli government restraint, not launching the ground invasion, has been a very wise move by prime minister netanyahu. nobody wins in this these situations and the civilian populations of both countries have been the big losers. but i do think, there is going to be a measure of respect for how the prime minister of israel has handled this in not going into gaza, if it can can end, as we hope, tomorrow, the next day, with a ceasefire. >> do you agree, jamie, nick says it was started by -- >> certainly i agree the big losers are the populations. they're the pawns in this game. and hamas used its population. i do think, however, there is a difference this time around. that hamas has the visitors of turkey, has the visitors of the iraqi government, other foreign ministers. that is new. hamas used to be fully isolated. but where i think nick is exactly right is that the israeli defense system, this -- this iron shield defense system,

has shown that the -- the united states can can work with israel, provide critical technology and eliminate some of the dangers that has existed in past bombardments from the -- from ham hamas. >> thanks very much to both of you. the republican party is facing questions after mitt romney's loss. what the gop must do moving forward from what we say is the real rising star. and in the middle east, both sides accuse the others of targeting civilians, a crucial accusation. you are extremely upset about it last night when we heard from the palestinian and it's really side. you took to twitter. tonight we have answer. do the accusations add up? they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education.

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bny mellon wealth management our fifth story "outfront" tonight. both sides blaming the other for the deaths of innocent civilians. here's "outfront." >> we are witnessing a deliberate escalation on the part of israelis to cause as much possible of civilian deaths. >> you really think they're trying for civilian deaths? that seems like a bit of a stretch, doesn't it? >> the majority of the people who are being killed today in the gaza strip are civilians. >> he said that israel is purposely targeting civilians. what do you say? >> no, of course we're not

targeting civilians. it's difficult, because the hamas terrorists are deeply embedded within the civilian population. they're using that population as human shields. >> do you have proof that's happening? >> oh, we can see it from the air. we had one case of an israeli pilot who had targeted a long-range rocket. and at the last minute had to abort his mission because there were children in the vicinity. >> that was last night on this show. the israeli ambassador to the united states and the plo ambassador to the united states. but who is really targeting civilians? "outfront" tonight, and a half tally bennett, former chief of staff to prime minister benjamin netanyahu, and rulea jirel, expert from "newsweek." prime minister netanyahu said today, no country can tolerate a wanton attack on its civilians. but israel is also killing civilians in gaza. so knowing that civilians are going to die, right?

>> the situation is simple. we have a terrorist state right next to us that's been bombarding us with over 1,200 missiles over the past week on our cities, deliberately. and we're responding. now, hamas is killing its own children because they embed the missile launchers inside kindergartens, inside hospitals. i've seen it with my own eyes. you have a kitchen, you have a living room, you have a family room and then you have the missile room inside a residential house. when you do that, it means you're killing your own children. so, yes, when someone shoots us in israel, we do respond. and is if there is children next to the missile-launcher, it's hamas killing them. >> rula, what do you say to that? this is the argument the israeli ambassador used too. that hamas uses children as shields, putting militants in

those locations. >> if hamas is a movement, and naftali said it's a state. let's remember, gaza is under siege, part of what is supposed to be a state that never happened to be a state. israel occupies the west bank since 1967, and they never gave them anything. the truth is, if hamas is a movement or a terrorist group, and they are doing what they are doing, israel is a democracy. so the answer of a democracy, when we know there are civilians, we try to avoid casualties. we try to do our best and find solutions to solve the conflict. but we are answering their attacks with other attacks and violence. you are building more hatred, mr. naftali. you are not providing solutions here. >> i do not provide solutions to terrorists. we have to eradicate terrorism and that's exactly what you're doing. let me be very clear. >> but that -- the other side --

actually -- >> let -- there's a bit of a delay. >> the other house would be showered with missiles. i'm asking you, would you tolerate that or would you respond? i think mrs. jabril is speaking nonsense. i have to be very frank about that. let's be clear about one more thing. >> i'm speaking intellectually. >> 100% of gaza over to the palestinians. they founded -- >> it's under siege. >> -- the independent state. ten days after we handed over 100% of gaza, they began -- no, it was not under siege. >> it is under siege. it's an open-air prison. >> 1 million homes in southern israel. >> it's an open-air prison. nobody is suggested for you to negotiate with hamas. what you are doing! mr. naftali, you are negotiating already with hamas in egypt directly. you negotiated with hamas already a year ago. >> there's one thing we've got to do with terrorists and that's hunt them down. >> hold on.

we have a bit of a delay, so rula, please finish and then nafalai. >> he's really dishonest and i'm sorry to say that. you are negotiating with hamas. you have israeli guys already in egypt negotiating directly with hamas. you negotiated with hamas a year ago over chille. handed them 1,000 prisoners. you are doing it secretly. we are bagging begging you to negotiate, behaving greatly is the p.a. you asked for security on the west bank, prosperity and you are humiliating them, not giving anything. and increasing settlement. for seven years mr. netanyahu, prime minister netanyahu didn't give anything, anything. and actually, empowered more hamas. because the moment they went, he negotiated with hamas over jihad, released prisoners. and you are sending and setting

up a very dangerous precedent. >> okay. >> if hamas -- >> let's let naftali respond. >> these are lots of words that are just covering the simple truth. the simple truth is that we handed over a piece of land, 100% of it to the palestinians. they founded a state. ten days after they began shooting at us, every time we hand over land to the arabs they begin shooting at us. what we have in gaza strip is sort of an al qaeda-type state that's full of terror, and has one goal, and it's to eliminate israel. i want to tell you, erin, if there's one good news from this week, it's wall-to-wall consensus in israel, we have to defend ourselves. we have determined to do that. we've got thousands of soldiers just waiting to defend our children. and we'll do that. let's not confuse. there's right and wrong here. the wrong side is the aggressors

who start shooting missiles at us. the right side is us who are defending ourselves. let's not make that mistake here. >> rula, is there a solutionrul from the perspective of hamas that would result in peace? >> there is a solution from the perspective of the world, not only of hamas or the palestinians. hamas are part of the palestinians but not the only part. the only part and the recognized part by the international community is the palestinian authority. look, we are not addressing the elephant in the room. the elephant in the room is the israeli military occupation. that's why every three, four years, we see the eruption of violence over and over. >> but there is no occupation. mrs. jebreal, there is no occupation in gaza strip. stop confusing things. >> you know what? you are denying facts on the ground. >> i have to pause the conversation. >> instead of that you turned it into the taliban of the middle east. >> thanks to both of you.

obviously an issue that inspires so much passion. you all know in your own living rooms. it was hard for them to restrain themselves. this is the passion people feel about that issue. we will take a break. future of the gop is next. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally.

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now to the future of the gop. after mitt romney's loss, there's been a lot of talk about what happens to the republican party. is it dead, can it be resuscitated, who is more to blame, who's a bigger jerk. the soul searching has gotten serious very fast. "outfront," roland martin, a writer for the national review. good to see both of you. i've got to start, roland, i don't know if you know this. david brooks wrote an op-ed and names you as one of the young writers and bloggers who are increasingly influential. i mean, hey. we have known that on this show for a year. >> we need balloons and streamers and fireworks. >> he said you are data driven, empirical and low key in tone. that is why we love you. okay. he was talking about how you are on social issues and economic concerns. does the rest of the gop need to be more like you? >> really, i suggest everyone think about being more like me, erin. you would look amazing with a shorn head. also, my fellow guest here, give

some thought to this look. because it might change your life for the better. >> i mean, you know -- >> to be serious, i think about the republican party in general, back in 2004, a lot of folks were saying the republican party's going to dominate for a generation, democrats are flipping out, and one thing that i said to give myself a little bit of credit is that well, no, george w. bush won this election by winning over working women in ohio. folks were concerned about their economic prospects but said hey, george w. bush is going to protect us from terrorism and what did he do? 2005, social security, personal accounts, comprehensive immigration reform. he wasn't addressing those core kitchen table bread and butter issues that a lot of middle class folks were aspirational. they want to be better off. but they're really concerned about -- they're a lot more concerned about health care and education and issues like that than they are concerned about taxes. what do you get from mitt romney? you get a campaign that's all about tax cuts rather than about the core kitchen table bread and

butter issues. i have been saying that's a big mistake for a long time. now you have a lot of republicans who are catching up, who are getting it. it's about time. >> do you think, roland, they can get it and make up the ground they've lost? so many people are saying you've lost hispanics, you're never getting them back, you're done, there's no more gop. is that ridiculous? >> first of all, i have michael steele on my tv show on sunday and we talked about this year. the republican party has to listen to people. they can't just say well, this is where we stand, what we stand for, and we really don't want to hear what you have to say. you look at what the democrats did, look at what president obama did. they looked at five, six, seven, eight different issues in terms of being able to put together their coalition which was a winning coalition. the republican party often only says one or two things. they say lower taxes, smaller government. okay, but inside of that, you still have to talk to people and i've made this point and republicans get mad at me when i

say they're scared of black folks, scared to talk to them. you look at the republican debate, when the question was asked what would you do to attract latinos to the party and they all talked about building a wall. they have to actually sit down, communicate with people and say what are you concerned about. what are your concerns, what are your issues, and not just a top down philosophy. if so, they will keep losing. >> so here's what they're trying to do. 2016's already started for all intents and purposes, from the republican side. so here's republicans trying to do a little bit of what you and roland are talking about. here's three of the people who are probably be running. >> we need to stop being the dumb party. we need to offer smart, conservative, intelligent ideas and policies. that's how we win elections. >> this is not about the republican party for those of us who are republicans. this is about limited government conservatism. the republican party is the home of that movement. >> we've got to do better. it's a combination of tone and message and reaching out to new and minority voters. >> you know, these are three

people who will be running and the mea culpa. rubio in particular talks about being a hip-hop fan, not a fan of pit bull. he likes eminem. >> huge tupac fan as well. >> what does this do for him? >> it's interesting because marco rubio's a genuine hip-hop fan, has been for a long time but part of this is also conveying -- >> i get it but it doesn't -- >> it's partly conveying the republican party needs candidates in tune of the country as it is. america is very different than it was in 1984, in 1980, and there's a generation of folks who really connect with this music and with this culture, and you need candidates who understand that. so i think -- >> oh, my god. >> please stand up. go ahead, roland. >> oh, my god. seriously? here's the deal, senator rubio. don't say you like tupac. are you listening to what tupac rapped about? are you talking about the war on drugs? are you talking about poverty? are you talking about